Do Welfare States Reduce Poverty? A Critical Shortcoming in the Standard Analysis of the Anti-Poverty Effect of Welfare States

Arbeitspapier

A standard analysis of the anti-poverty effect of taxes and income transfers is to compare pre-tax-transfer poverty and post-tax-transfer poverty. A critical shortcoming of the standard approach is that it treats pre-tax-transfer poverty as given and ignores potential effects of taxes and transfers on pre-tax-transfer poverty. Using cross-national variation, this study examines potential endogeniety of pre-tax-transfer poverty. The results suggest that both the generosity and efficiency of the tax/transfer system may influence the level of pre-tax-transfer poverty. If this is true, the standard approach overestimates the anti-poverty effectiveness of generous and/or targeted welfare systems.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: LIS Working Paper Series ; No. 233

Classification and Topics

• Classification: Wirtschaft
• Subject: Einkommensumverteilung ; Steuerpolitik ; Öffentliche Sozialleistungen ; Armutsbekämpfung ; Sozialstaat ; Industrieländer

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kim, Hwanjoon
• Event: Veröffentlichung
• (who): Luxembourg Income Study (LIS)
• (where): Luxembourg
• (when): 2000

Further information

• Handle: http://hdl.handle.net/10419/160905
• Last update: 10.03.2025, 11:45 AM CET